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RA’s Daily Russia News Blast – Oct. 4, 2007

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A file photo taken in 1957 shows the world’s first artificial satellite Sputnik I, launched by the Soviet Union. Russia marked the 50th anniversary of the launch of Sputnik, the tiny satellite whose crackly beeps started the Space Race between the Cold War superpowers.(AFP/Tass/File)

Russia may be “again becoming an authoritarian society,” although this does not seem to be hurting the economy. “Why should a successful president be held back by some constitutional formality?” Mikhail Gorbachev has defended the policies of President Putin. “Russia is a country with which America can get along. This is a reliable partner, but of course it will defend its national interest.” Opposition leaders comment on Putin’s intention to run for United Russia in the upcoming elections. Gazprom has reached a deal with Ukraine over a large gas debt after threatening to reduce supplies, but Kiev continued to deny that it owed as much as the $1.3 billion cited by the company. The European Commission will convene a co-ordination group to evaluate the dispute. Ukrainian President Viktor Yushchenko proposed forming “a broad ruling coalition” between Yulia Timoshenko’s Orange Revolution and Viktor Yanukovich’s Party of the Regions. There is speculation over the link between Yuskchenko’s announcement and Gazprom’s earlier threats to cut off Ukraine’s gas supply: “The president made his announcement 20 minutes after Gazprom announced that the conflict over natural gas had been settled.” The Kremlin’s economic adviser, Arkady Dvorkovich, has warned against the creation of more state corporations as a way to boost economic growth. “I view the fashion of creating state corporations as being extremely dangerous, particularly for the industries being proposed,” he said at a business forum. Investors buying into Russia’s newly liberalized electricity market should face strict monitoring, and a state body such as the Energy Ministry should regulate the market before it is opened up to free competition, according to Anatoly Chubais, head of former power monopoly Unified Energy System, which is soon to be dismantled. Russian billionaire Oleg Deripaska’s Basic Element and Strabag SE, the Austrian construction company, will pool their cement assets in eastern Europe. Russia’s housing, coal, agriculture, auto and mining industries all received good news today. Polish flooring maker Barlinek SA will spend $97m on a Russian factory; Magnitogorsk Iron and Steel Works bought 11% of coal producer OAO Belon; Black Earth Farming is planning to raise $300m in a public offering in Stockholm; Inchcape Plc, a UK chain of global car dealerships, bought Audi and Peugeot outlets in St. Petersburg for $43m; steelmaker Mechel, Russia’s sixth-largest, boosted first-half net profits by 169% to $489.5m; and the CEO of London-listed Peter Hambro Mining said that difficulties with the Natural Resources Ministry’s environmental agency were now past, that the current investment climate in Russia was the most favorable that it had ever been. The state rail monopoly, Russian Railways, has begun a campaign as part of its $500bn plan to re-develop the country’s railway infrastructure by 2030. PricewaterhouseCoopers in Russia has been threatened with the loss of its license for the second time in six months. Russia is to limit Polish meat and dairy imports, requiring production plants to be certified by Russian health inspectors. Russia’s foreign currency and gold reserves, the world’s third-largest, have climbed for a fifth consecutive week to a record $425.1 billion. A new pan-European thinktank, the European Council on Foreign Relations, launches this week, with one of its projects being an evaluation of the EU’s relations with Russia. Moscow and Washington resumed intensive negotiations on missile defense issues, with chances of the two reaching a compromise seeming slim. Russia’s Deputy Foreign Minister Alexander Grushko has spoken about the dangers threatening Europe if the US missile defense system is built there. Leaders of 11 Russian civil-society groups told the European Parliament’s human rights committee in Brussels that the bloc’s efforts to engage Russian authorities in a meaningful rights dialogue have failed. Lev Ponomaryov, chairman of the For Human Rights activist group, said, “We believe that the existing consultations with the European Union are not effective.” Western rights groups Amnesty International, Human Rights Watch and the International Federation for Human Rights urged the European Union to be more consistent and transparent in promoting rights in Russia. Russian and US space chiefs have signed agreements to cooperate on missions to search for potential water deposits beneath the surface of the moon and Mars. ”These two projects demonstrate the commitment by our countries to continue to look for opportunities where it’s mutually beneficial to cooperate,” said Michael Griffin, NASA Administrator. Meanwhile Russia is holding a series of ceremonies to mark the 50th anniversary of the start of the space age and the launch of Sputnik. Defense Minister Anatoly Serdyukov told the State Duma that the armed forces would reduce the compulsory term of service from 18 to 12 months next year. The UK market for homes priced at £5 million or more remains buoyant despite uncertainty in the financial markets largely due to overseas buyers from Russia and the Middle East. The man Britain wants to charge for the murder of ex-spy Alexander Litvinenko has sued Russian newspaper Kommersant, accusing it of damaging his reputation in a July article that linked him to the killing.